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Article No.24

A Research Paper on

Competitive Advantageof Indian IT Industry

Suparna Dhar

AIMA / AMU PHD Scholar

Abstract: Indian Information Technology (IT) Industry changed the economic landscape of India over

the last quarter of century. The industry made phenomenal multi-fold contribution to the economy. The IT and

IT Enabled Services (ITES) constituted to 8% of India’s Gross Domestic Product (GDP)in 2013 and provided

direct employment toabout 3 millionpeople and indirect employment to 9 million people. The journey that

started around 1980 grew rapidly over the years propelled by availability of talent pool, improvements in

telecom technology and favourable government policies. From a gross USD 100 million in 1992, it grew to

USD 147 billion in 2015.The growth curve went through peaks and troughs driven by series of events across

the world, like dotcom boom, recessions and WTC attack. In 2013, the industry had a market share of 53% of

the worldwide IT spend. The industry fuelled entrepreneurship in the country that resulted in 16,000 IT firms.

This research paper analysed the intrinsic and extraneous elements leading to growth and sustenance of

competitive advantage of the Indian IT Industry. Itdid an exploratory research of Indian IT Industry,over the

last two decades in terms of growth, impact on Indian economy and factors leading to its growth.It used

strategic management tools to analyse the strategic competitive position of the industry compared to BRIC

countries and other close competitors like Philippines.

Cost advantage,vast pool of skilled workers and increasing entrepreneurial activity were the factors fuelling

growth. High dependence on US and European market was assayed complemented by growth of domestic and

emerging markets. Threat from emerging IT provider economies increased the competitive landscape. The

country’s physical and network infrastructure needed improvement. Agility in identifying and servicing new

opportunities and innovation were imperative for sustenance of the industry’s competitive advantage.

Keywords: Indian IT Industry, competitive advantage, PESTLE analysis, SWOT analysis, Porter’s 5

forces method

INTRODUCTION

Indian Information Technology (IT) Industry changed the economic landscape of India over

the last quarter of century. The industry’s revenues grew from USD 100 million in Financial

Year 1992 to USD 147 billion in 2015. In 2005, the industry serviced 3.3% of global IT

market, serving nearly half of all Fortune 500 companies (Bhatnagar, 2006). In 2013, it

constituted 8% of India’s Gross Domestic Product (GDP) and a quarter of total exports and

provides direct employment to about 3 million people and more than 9 million in indirect

employment (Mittal, 2013). The industry had a market share of 53% of the worldwide IT-

BPM spend (Chandrashekar, 2014).

The Indian IT journey began around 1980 (Mathur, 2007). Since inception, the industry has

seen steady growth. A series of events over the last three decades changed the face of Indian

IT industry. The evolution of IT industry in India is a prime contributor to India’s economic

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growth. Until1990, the industry was limited to a handful of players. It primarily

servedsoftware development needs for India’score industry. At that time IT hardware /

software was expensive proposition.Most industry players in a developing country like

India did not opt for use of software in their operations. The same time, some US companies

looked towards India as a source of cheap labour, which provided a new opportunity to

India. New software companies started. Availability of low cost resources provided

competitive advantage to Indian IT companies (Jhamb, 2011). The cost of anIndian offshore

developer was about 25% and onsite Indian developer about 50% of that of US developer

(Nagala et al, 2006).During 1980 to 1990, the Indian government under the leadership of

Prime Minister Rajiv Gandhi brought significant changes to facilitate development of

Indian IT industry. Import duties were reduced which made hardware / software a viable

option for the core sector. IT gained special status, licensing procedures were simplified and

access to foreign exchange for software firms made easier.At the same time, the cost of

hardware / software went down drastically with the advent of PCs (Personal Computer) and

DOS (Disk Operating System) and other desktop Operating Systems. There was a paradigm

shift from mainframe and mini computers to desktops.Until this time, most of the revenue

for Indian IT firms came from body-shopping, supplying English speaking and IT literate

human resources to foreign shores. In the late 1980 and early 1990, telecom solutions

became available providing direct connectivity from India to US. More work started

moving offshore. In early 1990s, US immigration policy changes forced Indian software

exporters to look beyond the body-shopping model. The onsite-offshore model of software

services took shape.By 2000, the Indian IT industry was ready with some home grown

software for the international markets. The Y2K problem brought huge demand for software

services from the advanced countries. India, with its skilled, English speaking work force,

had the unique advantage as supplier of software services. The dot com boom helped in

further growth of the industry. The Business Process Outsourcing (BPO) business also

brought in an additional revenue stream.Indian IT serviced countries across the globe across

continents. However, majority of the revenue continued to come from US. This madeit

dependent on US economic conditions.After the boom, the World Trade Centre (WTC)

attack hit the US market hard, which was already reeling under dotcom bubble burst. The

following recession had an impact on Indian IT industry. However, the industry came up

with innovative propositions like quality benchmarking, managed services, etc. to overcome

the issue. During this time, the BPO sector grew steadily. Indian IT companies contributed

to other economies, generated 410,000 plus jobs in America (NASSCOM, 2015), which

reinforced India’s position as IT major.

Since the new millennium, various socio-economic conditions around the globe are

changing the face of business. Indian IT growth decelerated again in 2008-09 with the

recession in US following the housing bubble. The economic downturn in US affected

Indian IT industry in multiple ways. At a time when US people lost jobs in large numbers,

US corporate were sending jobs offshore to India for cost cutting. This agitated the US

citizens and the Federal government considered changes in regulations to retain jobs within

US. US laid stricter norms on H1B visa, making it difficult for Indian companies to depute

resources onsite.Other factors influencing performance of Indian IT industry included

exchange rates fluctuation affectingrevenues and entry of newer players in the market like

China and Brazil, posingtough competition to Indian IT industry. Competition in the market

for experienced IT resources and disproportionate increase in wages in the industry raised

cost of operations.Overwork and stress related problems were on the rise among the work

force leading to various kinds of health problems, which affected the society in general and

quality of work within the industry.

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Questions arise on the sustainability of competitive advantage of the industry in these

changing times. Are the factors that contributed to growth of the industry thus far, good

enough to provide the leading edge? What were the strengths, weaknesses, opportunities

and threats affecting Indian IT industry?What environmental factors influenced the

competitive advantage of the Indian IT Industry?

LITERATURE REVIEW

Talent: Cost advantage on account of skilled workforce(Nagala et al, 2006) and abundant

pool of English speaking technical resources (Bhatnagar, 2006) formed the foundation of

Indian IT industry. There is a growing demand of talent pool (Mathur, 2007). Knowledge

needed included organization’s structural capital including processes, technologies, patents;

human capital including ability, skill and expertise; and customer capital including

information about customers, suppliers, and stakeholders.Intellectual capital is a preeminent

resource of knowledge economy (Kavida et al, 2010). As an intangible asset, it

occupiedsignificance in assets portfolio of the knowledge intensive IT Industry.Skill

requirements of the IT industry evolved with introduction of pervasive internet access and

cloud computing (Misra et al, 2010), business technology consulting, business intelligence

and analytics (Agarwal et al, 2012), Near Field Communication (NFC), mobile computing,

business process and social media channel (Shaikh et al, 2015).Traditionally Indian IT

companies provided services low on the value chain in software development life cycle.

Over the years, Indian IT services went up the value chain, redefining the skill needs of the

industry (Jhamb, 2011). Knowledge managementformed a strategic resource and source for

competitive advantage for organizations fostering a learning climate and providing excellent

training facilities (Matthew et al, 2011). Availability of high skilled resources posed a

problem as Indian skilled resources moved to other countries. Success of the Indian IT

industry helped to reduce brain drain by creating rewarding opportunities within the

country.Facilitated by the availability of venture capital, Indians returned to the country to

start new software ventures. This facilitated “brain gain” reversing the “brain drain” and

helped “brain circulation” (Singh et al, 2015). NASSCOM fivefold vision comprised of

building innovation capability, new markets, addressing infrastructure and governance,

inclusive growth and developing talent pool.

Services in the value chain:In early years the India IT industry serviced custom software

applications market largely but lacked focus on packaged software another big market

segment (Bhatnagar et al, 1991). Gradually the skilled and experience were hungry to serve

the markets and move up the value chain for economic gains (Bhatnagar, 2006). Favourable

economic policies floated and supported by the Indian government led to increase in

entrepreneurship. Indian professionals built and leveraged personal network and reputation

to gain foothold in the markets in developed economies. Indian IT organization

benchmarked their processes with Global standards like Capability Maturity Model (CMM)

(Ghemawat et al, 2007), ITIL and ISO standards.Adoption of open source technology with

focus on usability was on the rise. (Andreasen et al, 2015).There was a need for faster

turnaround of ideas into executable software (Afshari et al, 2016).Processes to support

faster development turnaround of high usability software remained inadequate.Indian IT

companies created more IPs through Research & Development (R&D) resulting in rise in

number of patents (Kavida et al, 2010).Indian IT industry needed to create more IP, not only

for itself but also for the other knowledge intensive industries, to sustain the conviction of

knowledge economy of India.

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Technology: Success of IT industry was dependent on development of information and

communication technologies (ICT) (Mathur, 2007). ICT adoption is India increased, India

996.49 million telephone subscribers and 302.25 million broadband users as of as of March

2015 (TRAI report, 2015). Development of e-governance, e-commerce and e-banking

facilitated the growth of the domestic IT market.Research is the IT area focussed on

changing the relation between technology and human agency (Dutta, 2008). India still

ranked poorly in Network Readiness index, compared to its competitor countries (Refer

Table 1) (WEFGlobalITReport, 2015).

Table 1. World ranking of BRIC countries on network readiness parameters

Country

Parameter

India China Brazil Russia

Network readiness index 83 62 69 50

Environment sub-index: Political and

regulatory environment

82 52 95 79

Environment sub-index: Business and

innovation environment

115 104 121 63

Readiness sub-index: Infrastructure and

digital content

115 92 56 39

Readiness sub-index: Affordability 1 57 89 15

Readiness sub-index: Skills 102 59 108 52

Usage sub-index: Individual usage 121 80 62 43

Usage sub-index: Business usage 88 46 52 66

Usage sub-index: Government usage 61 39 71 47

Policy framework: India’s policy approach for IT comprised ofsetting up science and

technology bureaucracy to coordinate government administered projects in IT,

buildingSTPs to encourage cooperation between government, business, and universities,

and creating policy frameworkto exploit connections with the successful Indian

organizations (Nagala et al, 2006). The government strengthened infrastructure of existing

tier I and emerging tier II and tier 3 cities to facilitate ease of doing business (Mathur,

2007).

Geographic distribution of Indian IT market: India exported IT services to 150 countries

across the world in 2013-14(ECS Report, 2014). Indian IT exports spanned across US,

Canada, Europe including EU and non EU nations, Asia, Australia and New Zealand,

Africa and Middle East and Africa almost spanning across the globe. The United States of

America was India’s largest IT export market followed by Europe. European market

constituted primarily of UK followed by Germany, Netherlands, Finland, Switzerland,

Hungary and others (RBI survey, 2010). US constituted 57.59% of Indian IT

exportsfollowed by UK at 17% (ECS Report, 2014).US also topped the list in terms of

annual growth of IT exports from India. This shows Indian IT Industry’s dependency on US

market and economic conditions thereof.

Challenges: India’s competitiveness index is showing a downward trend since 2007 (WEF

Report, 2015). Cost advantage of the industry diminished with rising salaries (Ghemawat et

al, 2007; Vastupal, 2012). With shifting service needs and existing scale, questions arose on

the sustainability of growth, which was earlier proportional to headcount (Agarwal et al,

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2012). Developing countries across the world started replicating India’s IT business model.

Software projects were plagued by high failure rate, cost and time overrun and content

deficiency (Standish Group Report, 2015).Global Information Technology Report (2015)

show India’s global kill ranking at 102, below IT service providers like Sri Lanka, Mexico,

Malaysia, Philippines, Indonesia, et al. Most IT firms needed significant effort to deal with

IP related challenges (Basant, 2004). Average IT firm in India perceived IP protection as

important but prioritized access to market and complementary assets over IP

protection.Indian IT’s innovation ability was weak compared to Silicon Valley, venturing

into disruptive innovation like Apple or Google. In India, the focus was for technologies to

reach the market and encourage entrepreneurship rather than create a market need

(Krishnan, 2011).

METHODOLOGY

The objective this research was to analyze the Indian IT industry’s growth curve and ability

to sustain competitive advantage with changes in global economic factors.

Research Questions

1.What were the strengths, weaknesses, opportunities and threats affecting Indian IT

industry?

2. What environmental factors influencedthe competitive advantage of the Indian IT

Industry?

This was an exploratory researchto study the Indian IT industry in terms of growth and

factors determining its growth. Burgelman et al. (2008) proposed tools to analyse external

and internal factors used in formulation of Competitive Strategy. It discussed Porter’s Five

Forces Analysis as an effective tool that considered all stakeholders of the value chain. It

also discussed use of SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis

to determine company’s competitive positioning. The research used the following tools to

study competitive positioning of Indian IT Industry:

1. SWOT analysis to study Indian IT industry’s preparedness to meet challenges from

changing economic environment across the globe

2. PESTLE(Political, Economic, Social, Technological, Legal and Environmental) analysis to

study environmental factors contributing to competitive advantage of the industry

3. Michael E. Porter’s 5 Forces Model to analyze the Indian IT industry’s positioning

The research sourced data from secondary sources.

ANALYSIS

The IT Industry in India achieved phenomenal success and growth so far thus securing India

a branding as knowledge economy in the world market (Kavida et al, 2010). The research

broadly classified the factors, contributing to growth and competitive advantage of the

Indian IT industry into four categories:

1. Economic factors comprising of cost advantage and availability of large pool of English

speaking, computer literate talent which were fruits of India’s background as a developing

nation with colonial past and strong education system. Entrepreneurial drive in educated

ambitious professionals and fostered incubation helped develop first generation

entrepreneurs. Globalization across the world also fuelled this growth.

2. Technology factors like advances in Telecom Technology assisted in creating

global network and collaboration across geographies.

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3. Government policies like creating Software Technology Parks, tax holiday for 100%

Export Oriented Units, Special Economic Zones and withdrawing import duties of telecom

equipment stimulated growth.

4. Well planned strategic initiatives like Quality process benchmarking and certification and

investing in Knowledge Management initiatives enabled growth in initial stages. Industry

adapted to changing environmental needs developingoffshore centres outside India and

undertaking acquisitions to expand technology, expertise and customer base. India turned

around the problem of “brain drain” by evolving “brain circulation”. All put together,

Indian IT industry was branded as knowledge intensive service provider.

Future competitiveness of the industry is of critical importance for sustenance and further

growth. IMD World CompetitivenessYearbook 2015 ranked India at 44out of 61 countries,

arankingbased on economic performance, government efficiency, businessefficiency and

infrastructure. India ranked 83rd

in network readiness in The Global Information Technology

Report 2015, published by World Economic Forum.India’s competitive positioning has

direct bearing with the sustenance and growth of the Indian IT industry.As per OECD

reportdrivingfactors for India were cost effectiveness, quality assurance, supply of technical

graduates, availability of anadequate telecommunication infrastructure and a favourable

time zone relative to the United States andEurope.When compared to close competitors

providing IT services to the advanced economies, Philippines closely followed India on

productivity, cost and language skill parameters. Israel, Mexico and Ireland were close too.

However, India led when it came to surplus work force.

SWOT Analysis

Table 2 below depicts SWOT analysis of the Indian IT industry.

Strength Weakness

Cost advantage over competitors

Availability of vast pool of skilled work

force

English speaking ability gives access to

large market share

Brain circulation opening opportunities

Branding as knowledge economy

Increasing entrepreneurial activity

Expansion to other offshore locations

Acquisitions give access to technology,

expertise and markets

High dependence on US and European

markets

Inadequate infrastructure deterrent to

business investment

Lack of strong government leads to policy

impasse

Court delays and complicated laws leads to

negative branding

Increasing resource cost

Easily replicated models

Lack of disruptive innovation

Opportunities Threats

Opportunity in services up the value chain

Growing domestic market and fast growing

Asia Pacific market

Government impetus to research and

development

Competition from other developing

economies

Risk from foreign currency exchange rates

Economic slowdown in export destinations

Source: Prepared by author from preceding exploratory study

PESTLE Analysis

India’s democratic system and imbibing globalization, privatization and liberalization in

1991 boosted IT business (Mathur, 2007). India’s open market stance led to enormous

improvements.Yetprocedures required long andtedious government approval processes.

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Developed nations perceived India as easy target of terrorism, which tarred India’s image as

business destination.Political instability and corruption, topped with rampant bureaucracy

proved deterrent to business. Political instability was deterrent in decision-making process

affecting business environment.

Availability of vast pools of low cost high skilled resources was of prime advantage.

Financial factors like favourable exchange rates, availability of bank loans, venture

capitalists and FDI to provide capital for entrepreneurial activity helped growth of the IT

industry. High inflation and fluctuating exchange rates affectedprofitability over time. There

existed regional variations in service offerings and cost structure.

Educated and ambitious middle class, aspiring to seek opportunity and secure respect in the

world market through quality services,was the key asset. However,infrastructures including

transport and telecommunication, which were indispensable to economic

prosperityimproved, a lot remained to be done to overcome overstressed road, rail, and

airnetworks, unreliable water and power supply system, and a lack of public amenities. In

spite of having a large base of scientific and technical workers, policies and investment to

promote research and development, remained inadequate.The 11th five-year plan prioritized

R&D for Universities. To sustain growth, Government needed to reduce the gap between

academic research and business to maximize returns on R&D investment.

The Indian IT industry expected to be worth $225bn by 2020. IT productivity depended on

availability of fast network and bandwidth availability. Many companies did notupgrade

their technology infrastructure and continued to depend on outdated network, access points

and bandwidth, impacting operational efficiency and competitiveness.During the Y2K,

Indian companies were quick to respond to and seize the market opportunity taking India’s

IT exports from USD 125 million in 1997 to USD 2 billion in 2001. With bubble bursts and

economic recessions after 2001, many companies were slow and cautious to respond to fast

changing technology landscape and losing on big opportunities like big data analytics, cloud

and mobile computing.

Favourable changes in India’s legal and regulatory frameworkover the years aided

companies to grow businesses in the country. However, legal system was inadequate,

compared to many developedand emerging countries, to sustain India’s competitive

advantage as a business destination (Rani, 2015). The country lagged in protection &

enforcement ofIP rights.The taxation system was complicated. Complex laws governed

mergers and acquisitions.The legal systemwasmarred with court delays, corruption,

differentinterpretations of laws in different regions andcomplex system of applicability of

laws. India enacted Cyber laws, but both awareness and implementation of the

sameremained poor (Krishna et al 2015).

Porter’s 5 Forces Analysis

The research applied Porter’s Five Forces Analysis with respect to IT Industry.Figure 1

presents the analysis.

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Figure 1. Porter’s 5 Forces Analysis applied to Indian It Industry; prepared by author

Threat of New Entrants: Threat of new entrants was high due to:

Emerging service provider countries - Other offshore locationssuch as Eastern Europe, the

Philippines and China, emerged and posed threat to Indian IT industry because of their cost-

advantage.

Low switching cost –Switching cost was low as IT services did not involve heavy use of

physical assets. Buyers easily switched vendors across geographies to procure IT services.

Low customer loyalty– The IT services being B2B service, customers awardedbusiness

based on merit and/or brand promise rather than brand loyalty. Organizational buyers

trackedcontinuous increase of time, cost and quality efficiency.

Threat of Substitutes: Threat of substitutes was high for the IT industry as it thrived on

innovation. E-commerce came up as a substitute to brick and mortar commerce. M-

commerce wasprojected to substitute e-commerce in few years. The industry was dynamic

and technology changed fast. Companies were launching new products every day,thus

causing expiry of existing products within months, to launch newer and better product

versions. Quick changing technology and product landscape put pressure on Indian IT

companies to catch up.

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Buyer propensity to substitute – IT individual buyers consisted of tech savvy customers.

This segment was always open to test out new products and substitutes. Organizational

buyers of IT were open to substitutes as IT budget was always under the scanner for cost

optimization.

Ease of substitution - Information-based products and serviceswere prone to substitution,

just as online products easily replaced material product.

Bargaining Power of Buyers: IT buyers had high bargaining power due to:

Organizational buyers: IT industry customers were primarily organizational buyers. Many

IT companies thrived on providing services to one to a handful of customer organizations.

Therefore, the bargaining power of buyers was very high. Economic volatilityincreased

customer bargaining power.

Buyer information availability – The IT industry thrived on information. IT buyers had easy

and real time access to information leading to high bargaining power.

Bargaining Power of Suppliers: The IT industry did not require any raw materials. It only

required hardware/software and human resources. Since the industry was dependent on

skilled and knowledgeable work force, the bargaining power of the workforce was high.

Demand and supply of IT professionals in the new millennium was less favourable to

employees, but employees regained bargaining power with expanding job

market.Professionals with niche skills continued to be in high demand and commanded high

price.

Hardware / software suppliers: Other suppliers included the hardware and software vendors

who had limited bargaining power. Cloud computing has further reduced bargaining power

of hardware and software vendors.

The Intensity of Competitive Rivalry: The IT industry was highly competitive.

Particularly in times of recession, when IT budgets wereconstrained, the organizations

competed fiercely with each other for business. The threat of new entrants in IT arena is

high due to:

Low capital requirements – Initial set up cost for software companieswas very low as hardly

any infrastructure or heavy machinery required. With cloud computing in vogue, the

infrastructure cost using cloud technology became insignificant.

Large value chain– IT services spanned plethora of hardware, software, network and third

party services. It involved system architecture, design, development, testing, maintenance

and support. Small players gained entry in the domain by specializing in certain parts of the

value chain. Aggregation of IT services from different service providers was easy, so buyers

obtained services from multiple vendors as suited.

Favourable Government policy – IT business was largely cross boundary, i.e. spanning

across different geographical and political boundaries. Government policy at times

determined both setting up and operations. For example, some Indian state governments

promoted new IT companies. On the other hand, visa restrictions by advanced economies

affected business from India.

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Sustainable competitive advantage through innovation – Most large organization created

R&D involved in innovation and competency development centres to build competency.

Training formed an important functionfor cross skilling and skill up gradation in a rapidly

changing technology environment.

LIMITATIONS AND SCOPE FORFURTHER RESEARCH

This research did a exploratory study of the competitive position of the Indian IT industry.

The research depended on secondary data only derived from industry standard reports and

research papers.It stopped short of quantitative methods of the data analysis and hence any

conclusive analysis.

Scope for further research emerged from this exploratory study:

1. Study the extent of impact of the factors contributing to growth of the IT Industry in relation

with competition

2. Comparative study of growth of IT industry in other countries with Indian IT Industry

3. Study potential strengths and weaknesses in technology adoption in India

4. Study the correlation between process quality benchmarks and profitability in Indian IT

companies

5. Study Knowledge Management process and practices in Indian IT companies and its effect

on gaining and retaining competitive advantage

6. Study the effect personal networking in Indian IT industry

7. Study emerging market opportunities for the Indian IT Industry

CONCLUSION

On the technology front, digitisation of content and increased connectivity led to a rise in IT

adoption by media. Emerging technologies presented an entire new gamut of opportunities

for IT firms in India. Social media, mobile computing, data analytics and cloud computing

were poised to provide US$ 1 trillion opportunity by 2020 (NASSCOM, 2009). Cloud

represented the largest opportunity - around USD 650 billion to USD 700 billion by 2020.

Social media came second - offering a market opportunity of USD 250 billion by

2020.Technologies such as telemedicine, mHealth, remote monitoring solutions and clinical

information systems, expected to boost demand for IT service across the globe.

Demographic trends showed that Japan’s working age population was set to decline by 8

million by 2020. In the same timeframe, US aged population expected to increase by 16

million. Industry expected this resource gap to bring opportunities to fulfil, as well as

require services to support the aging population. India needed focus to build high

competence talent pool to service and compete with other nations vying for this market.

New strategies to serve the bottom of the pyramid, unleashing technology to service the

underserved were deemed to increase opportunities to innovate products and services for

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this new market segment. At the same time, industry projected increased needs for

governance, risk management, IT security, and global accounting standards. IT operations

needed to focus on automation and process orientation to increase efficiency and hence cost

advantage. Global supply chains in human resource deployment were expected to increase

collaborative virtual work force.India needed to improve innovation capability to compete

with global innovation hubs like Silicon Valley, Japan and Tel Aviv. NASSCOM proposed

enhancing human capital by serving domestic markets and improved government,

infrastructure and regulatory support approach to build India’s innovation capability.

The primary risks and concerns that India needed to prepare for while embarking on the

new fanged approach included internal factors like political uncertainty, policy

environment, slow decision making as well as extraneous factors like Global economic

uncertainties, restrictive data protection regime, and other macro-economic conditions

including trade flows.

In the time of rapidly changing economic landscape of the world, Indian IT Industry was at

cross roads. While the industry achieved phenomenal success in branding India from a slow

moving, primarily agrarian economy with dim industrial activity to a knowledge economy

with vast talent pool, entrepreneurial activity and innovation. India’s relatively poor

infrastructure, slack legal system, political instability and corruption threat to tarnish India’s

IT promise in the highly competitive world market. To compete effectively with the

emerging countries like other BRIC nations, Philippines, Mexico, Israel and others, to grab

a larger market share to keep and increase its contribution to growth of India’s economy, the

Indian IT Industry neededto engage in acquiring domain knowledge and innovation in

emerging market trends like telemedicine, mHealth, remote monitoring solutions and

clinical information systems. The countryneeded to focus on building and effectively

utilizing infrastructure, specifically network infrastructure to address efficiency and growth

needs of the Indian IT Industry. Indian government need to improvise ways to foster India

into an innovation hub. Industry needs to monitor economic conditions closely.

Traditionally the IT industry had high dependency on US market.There was scope to

expand to less tapped markets in Europe and Asia Pacific. Economic turmoil in other

countries was likely to affect the industry. The industryneeded to increase focus on

providing effective solutions to the emerging markets including domestic and international

markets. It needed to engage in inclusive growthand holistic development of society in the

going forward.Indianeeded to address risks including internal factors like political

uncertainty, policy environment, slow decision making as well as extraneous factors like

global economic uncertainties, restrictive data protection regime, and other macro-economic

conditions including trade flows. Cyber laws needed to be stringent and implemented

effectively to ensure security and instil confidence in international customers.

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